Oil explorer Tullow Oil (TLW) gives a boost to a battered E&P sector with news of successful drilling in Kenya. Its own shares are up 6.3% to 161.6p as it reveals the Etom-2 well onshore northern Kenya has struck 102 metres of net oil pay in two columns.
This add significantly to the potential of the existing Etom discovery – with this latest well encountering the best quality reservoir in the South Lockichar basin to date. A number of observers now believe the basin as a whole could contain up to a billion barrels of oil.
First Energy Capital continues to flag Tullow as its top pick and reiterates a price target of 330p. Analyst Stephane Foucaud says: ‘The reservoir thickness encountered by the Etom-2 well is a significant increase on the previously drilled Etom-1 well which encountered 10 metres of potential net oil pay.
‘Tullow indicated that this gave full confidence in a 2C Resource base of 600 mmbbl which includes Etom. We believe that the overall discovered volumes to date are much larger than this.’